Jones Act Fleet Financing

As political chatter centers on rebuilding the U.S. maritime industry, Brett Hewitt, Executive Director, Marine Finance, Wells Fargo Equipment Finance, offers a lender’s-eye view of a market where vessels are expensive, assets can remain productive for decades and the quality of the operator can be every bit as important as the collateral.

For lenders, one of the Jones Act market’s biggest attractions is remarkably straightforward: boats last a long time.“The collateral has a long useful life,” Hewitt said, noting that vessels are documented with the U.S. Coast Guard and subject to inspection, maintenance and regularly scheduled drydockings. “We know that collateral is going to be there to support our deals as we structure them.”

The Jones Act itself provides another layer of comfort. The law creates a defined domestic market protected from foreign competition, something Hewitt says can contribute to relatively consistent cash flows for established operators. But collateral is only one piece of the credit puzzle.

Whether Wells Fargo is providing conventional term debt or bareboat charter financing — where the bank owns the vessel, takes the depreciation and charters the asset — Hewitt said cash flow remains paramount. Beyond that, Wells Fargo digs deeply into an operator’s safety